asked the Minister for the Environment the plans he has for dealing with the escalating cost of houses and building land.

73.

asked the Minister for the Environment if his Department have under consideration any plans to counter the huge increase in house prices.

With the permission of the Ceann Comhairle, I propose to take Questions Nos. 8 and 73 together.

I would refer the Deputies to paragraphs 5.15 to 5.19 of the Green Paper on Development for Full Employment. Arising from the proposals in the Green Paper, I informed building societies in August last of the Government's decision that at least 60 per cent of the total funds available to them for mortgages should be allocated in providing loans not exceeding £13,000 each and that at least a further 20 per cent of available funds should be allocated in providing loans of between £13,000 and £16,000. I also informed the societies that certificates of reasonable value should be furnished by all applicants for loans not exceeding £16,000 for the purchase of new houses. The prices of all grant-type new houses and flats provided for sale are also subject to scrutiny by my Department under the certificate of reasonable value system. Accordingly, most new houses and flats are now subject to these controls. The societies are also required to maintain the apportionment of loans as between new and previously occupied houses at current levels.

Over the most recent 12 month period for which figures are available, the average price of houses for which certificates issued increased by only two-thirds of the average increase for all new houses. In addition, the Quarterly Bul-letin of Housing Statistics which will be published shortly by my Department will indicate that the overall average gross price of new houses for which loans were approved by the principal lending agencies in the quarter ended 30 September 1978 increased by 3.4 per cent during the quarter compared to a corresponding increase of 8.4 per cent in the preceding quarter. I am hopeful that the measures announced last August will continue to have a moderating effect on the rising prices of new houses.

I am keeping the general question of house price increases under continuous review in my Department. I think that there is scope for tightening up the CRV system and I am considering what action I can take in the context of the Housing (Miscellaneous Provisions) Bill, 1977, which is now being prepared in my Department. It would be impractical to control the sale prices of previously-occupied houses.

In so far as the cost of building land is concerned, I would refer the Deputies to my reply to Questions Nos. 338, 346 and 363 of 11 October 1978. Since July 1977 I have increased very substantially the capital available for sanitary services with a view to increasing the supply of serviced land. I also increased recently the subsidisable cost limit on each developed site provided by local authorities from £900 to £1,500 so as to encourage the provision of modestly-priced private houses.

Is it not a fact that in the year from June 1977 to June 1978 prices have risen by as much as 32½ or 33 per cent? Is it not also a fact that the prac-tice of gazumping in one way or another is widespread and that there must be some way in which statutory control of this practice can be established? The measures taken by the Minister so far have not been effective? Would the Minister not agree——

The Deputy has asked a question and should allow the Minister to answer.

As a result of Government action in August 1978 the rate of increase in the price of houses, relatively speaking, has reduced considerably.

In connection with the certificate of reasonable value, is it possible for the Minister to fix prices, to establish the price of the house? Is it possible to do that?

It is not, because many factors have to be taken into consideration in the issuing of a certificate of reasonable value.

In view of the fact that the price of housing, as has been admitted, has increased by 33 per cent and that the price of both material and labour has increased by only 7 per cent, what accounts for the 26 per cent increase?

Factors which have directly affected house price increases over the past year or so include growth in demand for private houses fuelled up to recently by increased availability of mortgage finance, escalation in the cost of serviced land, scarcity of skilled labour accentuated by an unprecedented increase in house improvement works, the tendency for builders to incorporate kitchen equipment and built-in furniture and to build a better type, better quality house, a certain degree of trading up in the market, the fact that between early 1974 and mid-1977 the rate of increase in house prices lagged well behind the rate of increase in wholesale prices generally—that leeway has now been made up—and increases in disposable incomes. All these factors contributed.

Houses were cheaper under the Coalition.

No. In the year ended 31 March 1974 the cost of house building increased by 36 per cent. The only effective controls over house prices were introduced by Fianna Fáil.

Order.

Despite the deluge of statistics and goodwill in the Minister's reply, is it not a fact that the prices of new houses increased in the order of 25 per cent more than building costs during the period to which the Minister referred?

That question has been answered.

The question also refers to the price of building land and we did not hear anything in the Minister's reply about that. Is the Minister aware that prices for new houses for which loans were approved by building societies in the 12-month period to which he refers increased by 44.1 per cent, that prices for new houses for which loans were approved by insurance companies rose by 37 per cent and that prices for houses for which loans were approved by the associated banks rose 37 per cent? How can the Minister justify pretending to tell us that there is a satisfactory position regarding house prices at present in the light of those facts? Secondly, would he comment on the situation now prevalent regarding the price of building land when in the Dublin area building land sold in recent weeks for £120,000 an acre?

There are many questions on the Order Paper relating to the same subject and I do not want the Deputy to anticipate them.

The question is quite specific.

A last supplementary, please.

What about a reply?

The Minister may reply.

I said in my original reply that as regards the cost of building land I would refer the Deputies to my reply to Questions Nos. 338, 346 and 363 of 11 October 1978. Since July 1977 I have increased substantially the capital available for sanitary services with a view to increasing the supply of serviced land. Recently I increased also the subsidy cost limit on each developed site provided by local authorities from £900 to £1,500 in order to encourage the provision of modestly priced private houses. In addition, the Kenny Report is under active consideration by the Government. This report was commissioned by the previous Fianna Fáil administration but the Coalition Government did nothing about it.

I did not mention the Coalition Government or the Fianna Fáil Government. I am not interested in playing politics with the housing situation.

I am calling Deputy Quinn.

I wish to ask the Minister a final supplementary. Is he willing to set up an inquiry regarding house costs and building costs?

I have called Deputy Quinn.